Endogenous Sunk-Costs Technology and Home Market Effects

Shin-Chyang Lee

International Journal of Economics and Finance, 2016, vol. 8, issue 3, 117-122

Abstract: Sutton (1991, 1998) proves that the home market effects would reverse with the assumption of the labor requirements with endogenous sunk costs. Departing from the original Helpman-Krugman modeling assumptions, we introduce the endogenous sunk costs of production to trading partners, and show that home market effects will be offset but not reverse, a result opposite of Sutton (1991, 1998).

Keywords: endogenous sunk costs; home market effects (search for similar items in EconPapers)
JEL-codes: F12 (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:8:y:2016:i:3:p:117-122

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